New legislation aimed at buffering potentially weak federal funding for transportation infrastructure could add a one-time $30 billion boost.
U.S. senators Jim Talent, R-Mo., and Ron Wyden, D-Ore., gave an overview of the Build American Bonds legislation during a press conference yesterday.
If approved by Congress and the president, the new proposal would provide a guaranteed $150 million annually for each state to build road, public transportation and rail projects as directed through the reauthorized version of the Transportation Equity Act for the 21st Century, currently under Congressional review.
The new legislation would also allow the construction of multi-state corridors, border planning and capacity improvements and intermodal connectors.
“The amount of money proposed by the administration, the House and the Senate doesn’t come close to what is needed to meet our nation’s transportation needs,” said Stephen Sandherr, chief executive of the Associated General Contractors of America. “There is great hunger around the country for better, safer roads, but little appetite in the administration or Congress to provide the needed revenue.”
The Bush administration 2006 budget proposal outlined a $284 billion funding package for the transportation industry in a reauthorized TEA-21 bill. The legislation, which provides authority for highway and transit spending, expired Sept. 30, 2003, and has operated under short-term extensions since then.
The Talent-Wyden proposal was included in last year’s Senate-approved highway reauthorization bill. Under the proposal, the federal government will float bonds in the amount of $39 billion, of which $9 billion will be invested to pay off the principle in 30 years. An annual cost of $1 billion will be needed to service the debt.
The new legislation could provide additional funding to reduce many commonly cited ailments of the current U.S. transportation system: congestion and deteriorating road conditions – said to cause the death of more than 12,000 people each year, according to AGC.
The proposed funding would also provide states a buffer for what Brian Deery, senior director of AGC’s highway and transportation division, calls transportation “mega-projects.”
“When you fund these [projects] out of your state coffers, it doesn’t leave a lot of money for anything else,” Deery said.
Other highlights of the potential legislation cited by AGC were enhanced long-term economic growth, and the creation of job opportunities – an estimated 47,500 jobs for every $1 billion in funding for federal transportation infrastructure – within the construction and transportation industry.
Deery said the Bush administration is currently against any additional funding for the transportation industry, which will make passage of the new legislation up to House and Senate approval.
“The President opposes it. That’s the bottom line,” he said.
However, Deery said this proposed legislation is the best way of raising needed transportation funding with the least impact on government spending.
Patrick Beeson can be contacted at [email protected].
